Axing the tax, the government's new laws to dump the mining tax

The government unveils its laws to scrap labor's mining tax, how it will hit school kids and small businesses.

Transcript

EMMA ALBERICI, PRESENTER: The Federal Government has moved on its key election pledge to abolish Labor's mining tax. It's unveiled legislation to scrap the tax, and in another potentially budget-boosting measure, has announced a scoping study into the sale of Medibank Private.

The Coalition says the moves could improve the Commonwealth's bottom line by more than $17 billion, but both measures might be opposed by Labor.

Political correspondent James Glenday reports from Canberra.

JAMES GLENDAY, REPORTER: The industry fought against it furiously, as did the Coalition. And today, the Treasurer released draft legislation to axe not just the tax, but much of the spending associated with it.

JOE HOCKEY, TREASURER: By getting rid of the mining tax package, we are saving the budget over $13 billion.

JAMES GLENDAY: As promised, the Schoolkids Bonus, which is worth $410 for primary students and $820 for secondary students will go, along with small business tax breaks and low income superannuation contributions.

The Coalition wants the bill before the Senate this year.

JOE HOCKEY: Well you can't keep paying a schoolkids bonus when it is funded by borrowed money.

JAMES GLENDAY: But the Opposition and the Greens might block the legislation in the Upper House.

CHRIS BOWEN, SHADOW TREASURER: We have a fundamental view in the Labor Party that the minerals of Australia belong to all Australians.

JAMES GLENDAY: Meaning the Coalition could have to wait until the new senators are sworn in next July, when the party of mining magnate Clive Palmer holds the balance of power.

CHRISTINE MILNE, GREENS LEADER: I think the only people cheering today will be the big miners, the Business Council of Australia.

JAMES GLENDAY: As part of its push to get the budget in check, the Coalition's also taken steps towards selling Medibank Private. It's ordered a scoping study which will report back in February.

MATHIAS CORMANN, FINANCE MINISTER: We will only progress the sale of Medibank to its ultimate conclusion if market conditions are right and if we can get an appropriately good deal for taxpayers.

JAMES GLENDAY: Selling the health insurer has been a goal of the Coalition since 2006 and it could raise more than $4 billion. But some medical professionals are worried. The Australian Medical Association says the sale could force premiums up and drive the quality of health insurance packages down.

STEVE HAMBLETON, AMA PRESIDENT: Our analysis last time was that there was likely to be pressure on premiums, not just on Medibank Private customers, but on all customers, because if premiums go up and the pressure on keeping them down is removed, we'll all feel that impact.

JAMES GLENDAY: The AMA wants the Government to address its concerns well before Medibank Private is sole.

Meanwhile, the federal Liberal MP at the centre of the expenses saga has defended his use of taxpayer money. Don Randall repaid more than $5,000 after visiting Cairns on electorate business, even though his seat is in Western Australia. In an interview with a Perth newspaper, his first since the story broke, Mr Randall says he's always complied with the rules and that he travelled to Cairns in his role as a shadow parliamentary secretary. He's says he's been avoiding the media because reporters have been looking for what he calls a "gotcha moment".

But one of his colleagues has had a heated exchange with a reporter. The BBC's Razia Iqbal asked Environment Minister Greg Hunt about Tony Abbott's views on climate change.

GREG HUNT, ENVIRONMENT MINISTER: Look, with the greatest respect, you can swear on international radio, you can invite me from Australia to do this, you can be profoundly rude. I'm happy to answer, but I'm not going to be sworn at.

RAZIA IQBAL: Mr Hunt, I'm merely quoting your prime minister.

GREG HUNT: No, you're not. What you are doing is taking out of context a private conversation.

JAMES GLENDAY: It was part of a program discussing if the NSW bushfires were linked to climate change.

James Glenday, Lateline.

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